Tariff Uncertainty Dampens Outlook for Kitchen & Bath Market
Bethlehem, PA, June 3, 2025-Uncertainty regarding tariff policy is “heavily influencing” a “more muted” outlook for the kitchen and bath industry, with industry pros now rating trade issues as their most pressing concern impacting prospects in 2025, reports the Q1 2025 Kitchen & Bath Market Index (KBMI), a quarterly analysis of market conditions conducted by the National Kitchen & Bath Association.
“The ultimate outcome of this fundamental reshaping of U.S. trade policy is still to be determined,” said Bill Darcy, CEO of the Bethlehem, Pennsylvania-based NKBA. “In the meantime, the kitchen and bath industry is contending with yet another element of uncertainty--something that tends to adversely affect short-term growth.”
According to Darcy, going into 2025, industry pros expressed “cautious optimism” over a “return to gradual growth” for the kitchen and bath market, following two consecutive years of decline.
However, he pointed now to “two big unknowns that represent downside risk” to the NKBA’s earlier forecast. The first, he said, is what will happen with the so-called “missing middle” – the large group of homeowners chomping at the bit to start mid-range renovations, but who’ve delayed the projects, in large part, because of stubbornly high borrowing rates.
“The second unknown, Darcy said, is the impact of tariffs and changes to immigration policy.
“We’re still waiting to see how much these factors will change the cost of kitchen and bath materials and labor – and how those increases will alter consumer behavior,” Darcy observed, noting that tariff-related concerns and fears of a recession impaired consumer and business confidence in the first quarter of 2025, “diminishing the industry’s ability to plan.”
According to the NKBA, kitchen and bath manufacturers’ orders rose 4.4% year-over-year in the first quarter, “due in part to pre-buying by downstream firms anxious about pending tariff-related price increases.” Input costs rose significantly in 1Q, adding to inflationary pressures, the association added.
Among other key KBMI findings:
- Kitchen and bath retail and distribution firms reported that their suppliers raised prices an average of 5.2% year-over-year in the first quarter, “reversing previous progress on kitchen and bath product inflation.” Markups were highest, at 7%, for appliances, which have heavy exposure to countries impacted by tariff policy shifts, the NKBA reported, noting that many firms “had no choice” but to raise prices in response. Kitchen and bath builder and remodeler pricing grew 5.2% on average in 1Q25.
- Two-thirds (68%) of surveyed kitchen and bath firms reported that consumers either held steady on product quality or downgraded to lower-grade products in 1Q25, reflecting caution in the planning of kitchen and bath renovations.
“The industry expects supply chain disruptions to increase, and pricing to continue to drift upward, as tariffs re-shuffle the international trade balance,” Darcy said. “It’s a volatile period for our industry.”